Key Points:Where bargaining representatives disagree about the scope
of an enterprise agreement, employers have bargaining obligations
in respect of all employees who fall within the widest proposed
scope, even if the employer has not agreed to bargain in respect of
some of those employees.

It is clear that employers will not be able to restrict the
scope of a proposed enterprise agreement by simply failing to issue
a notice of representational rights to certain employees, following
the recent Fair Work Australia Full Bench decision in MSS
Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union
[2010] FWAFB 6519.

The case involved an appeal from a decision of Commissioner
Cloghan in June 2010, who granted a protected action ballot order
application in respect of employees of MSS who worked as ticket
inspectors on Perth's public transport network.

The bargaining for a new enterprise
agreement

Since March 2010, MSS and the Union had been bargaining for a
new enterprise agreement to cover certain employees who worked on
MSS' contract to provide services to the Western Australian
Public Transport Authority. The Union was seeking an agreement to
cover the following groups of employees:

Revenue Protection Officers;

Patrol Officers; and

Aboriginal Liaison Officers.

MSS, however, only agreed to bargain for an agreement to cover
Revenue Protection Officers, and accordingly, only issued a notice
of representational rights to those Officers.

The application to Fair Work Australia

The Union applied to Fair Work Australia for a protected action
ballot order pursuant to section 437 of the Fair Work Act, in
respect of all three categories of employees, on the basis that
they would be covered by the Union's "proposed
agreement" for the purposes of section 437. Commissioner
Cloghan granted the Union's application and made the order.

MSS had not agreed to bargain in relation to Patrol Officers
and Aboriginal Liaison Officers; and

no notice of representational rights had been issued to those
classes of employees.

MSS argued that the Union was therefore not a bargaining
representative for those employees, and as such it did not have the
requisite standing to apply for the protected action ballot order,
required by section 437 of the Act.

The Full Bench's decision

The Full Bench upheld Commissioner Cloghan's decision,
holding that he:

"was correct to proceed on
the basis that the failure to issue these notices was not an
impediment to the granting of the LHMU's application for a
protected action ballot order extending to the Patrol Officers and
Aboriginal Liaison Officers, irrespective of whether MSS had agreed
to bargain in relation to those categories of employee or issued a
notice of representational rights to all
employees".

Issuing a notice of representational rights is not a
prerequisite to the existence of bargaining
representatives

The Full Bench clarified that a group of employees can in fact
be represented in bargaining for a proposed enterprise agreement by
a bargaining representative, notwithstanding that a notice of
representational rights has not been issued by the employer to
those employees in accordance with the employer's obligation to
do so under section 173(1) of the Act.

This is of particular relevance not only in relation to
applications for protected action ballot orders, but also
applications for a majority support determination pursuant to
section 236 of the Act.

Where there is a dispute as to scope, a notice of
representational rights must be issued to the broadest proposed
group of employees

The Full Bench then confirmed that, where an employer has agreed
to bargain in relation to a group of employees within the scope of
an agreement proposed by another bargaining representative, the
employer is required to issue a notice of representational rights
to all employees who would be covered by the
broadest scope proposed by any bargaining representative.

Merely issuing a notice of representational rights to the
sub-group of employees in respect of which the employer wishes to
bargain is not enough to discharge the employer's obligation
under section 173(1) of the Act.

Bargaining is to proceed on the basis of the broader
proposed scope while bargaining representatives remain in
disagreement as to scope

It follows that bargaining (which must be undertaken in good
faith by all bargaining representatives) must proceed in respect of
the broadest proposed scope until the scope dispute is resolved
(either by agreement as a result of continued bargaining, or by
Fair Work Australia issuing a scope order pursuant to section 238
of the Act).

What does this mean for employers?

If an employer agrees to bargain with a Union and/or other
bargaining representative(s) in respect of a group of employees
proposed to be covered by the Union or other bargaining
representative(s), the employer must meet its bargaining
obligations towards the broadest group of employees proposed to be
covered by the agreement, until scope issues are resolved. This
includes the issuing of notices of representational rights and
bargaining in good faith.

Failure to meet these obligations could result in an application
for approval of an enterprise agreement by Fair Work Australia
being rejected, because of failure of the employer to meet certain
pre-approval requirements contained in the Act. It could also lead
to applications for bargaining orders being lodged against the
employer and bargaining orders being made by Fair Work Australia
against the employer.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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